GM Financial Reports Full Year and December Quarter 2017 Operating Results

  • Full year income from continuing operations of $1.1 billion; December quarter income from continuing operations of $450 million
  • Full year retail loan and lease originations of $45.3 billion; $10.2 billion for the December quarter
  • Earning assets of $86.0 billion at December 31, 2017
  • Available liquidity of $17.9 billion at December 31, 2017

FORT WORTH, Texas--()--GENERAL MOTORS FINANCIAL COMPANY, INC. (“GM Financial” or the “Company”) announced income from continuing operations of $450 million for the quarter ended December 31, 2017, compared to $242 million for the quarter ended December 31, 2016. Income from continuing operations for the year ended December 31, 2017 was $1.1 billion, compared to $657 million for the year ended December 31, 2016. For the quarter and year ended December 31, 2017 we recognized the effect of the Tax Cuts and Jobs Act and recorded a $240 million tax benefit.

Retail loan originations were $4.4 billion for the quarter ended December 31, 2017, compared to $4.7 billion for the quarter ended September 30, 2017, and $3.9 billion for the quarter ended December 31, 2016. Retail loan originations for the year ended December 31, 2017 were $19.9 billion, compared to $14.5 billion for the year ended December 31, 2016. The outstanding balance of retail finance receivables was $32.8 billion at December 31, 2017.

Operating lease originations were $5.8 billion for the quarter ended December 31, 2017, compared to $6.5 billion for the quarter ended September 30, 2017, and $5.9 billion for the quarter ended December 31, 2016. Operating lease originations for the year ended December 31, 2017 were $25.4 billion, compared to $25.2 billion for the year ended December 31, 2016. Leased vehicles, net was $42.9 billion at December 31, 2017.

The outstanding balance of commercial finance receivables was $10.3 billion at December 31, 2017, compared to $9.5 billion at September 30, 2017 and $7.9 billion at December 31, 2016.

Retail finance receivables 31-60 days delinquent were 4.1% of the portfolio at December 31, 2017 and 4.6% at December 31, 2016. Accounts more than 60 days delinquent were 1.7% of the portfolio at December 31, 2017 and 2.0% at December 31, 2016.

Annualized net charge-offs were 2.2% of average retail finance receivables for the quarter ended December 31, 2017 and 2.6% for the quarter ended December 31, 2016. For the year ended December 31, 2017, retail net charge-offs were 2.0%, compared to 2.4% for the year ended December 31, 2016.

The Company had total available liquidity of $17.9 billion at December 31, 2017, consisting of $4.3 billion of cash and cash equivalents, $12.5 billion of borrowing capacity on unpledged eligible assets, $0.1 billion of borrowing capacity on committed unsecured lines of credit and $1.0 billion of borrowing capacity on a Junior Subordinated Revolving Credit Facility from GM.

Earnings resulting from the Company's equity investment in SAIC-GMAC, a joint venture that conducts auto finance operations in China, were $44 million for the quarter ended December 31, 2017 compared to $42 million for the quarter ended December 31, 2016. Earnings for the year ended December 31, 2017 were $173 million, compared to $151 million for the year ended December 31, 2016.

Operating Results

As previously announced, on March 5, 2017, our parent company entered into an agreement with Peugeot S.A. to sell certain businesses and other assets in Europe, including certain of our European financial subsidiaries and branches. On July 31, 2017, GM closed the sale of the Opel/Vauxhall business to Peugeot S.A., and on October 31, 2017, we closed the sale of certain of our European financial subsidiaries and branches to Banque PSA Finance S.A. and BNP Paribas Personal Finance S.A. The results of operations of these European subsidiaries have been reported as discontinued operations for all periods presented and the assets and liabilities have been reported as held for sale at December 31, 2016.

About GM Financial

General Motors Financial Company, Inc. is the wholly-owned captive finance subsidiary of General Motors Company and is headquartered in Fort Worth, Texas. For more information, visit www.gmfinancial.com.

Forward-Looking Statements

This presentation contains several “forward-looking statements.” Forward-looking statements are those that use words such as “believe,” “expect,” “intend,” “plan,” “may,” “likely,” “should,” “estimate,” “continue,” “future” or "anticipate" and other comparable expressions. These words indicate future events and trends. Forward-looking statements are our current views with respect to future events and financial performance. These forward-looking statements are subject to many assumptions, risks and uncertainties that could cause actual results to differ significantly from historical results or from those anticipated by us. The most significant risks are detailed from time to time in our filings and reports with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2017. Such risks include - but are not limited to - GM’s ability to sell new vehicles that we finance in the markets we serve; the viability of GM-franchised dealers that are commercial loan customers; the availability and cost of sources of financing; our joint venture in China, which we cannot operate solely for our benefit and over which we have limited control; the level of net charge-offs, delinquencies and prepayments on the loans and leases we originate; the effect, interpretation or application of new or existing laws, regulations, court decisions and accounting pronouncements; the prices at which used cars are sold in the wholesale auction markets; vehicle return rates and the residual value performance on vehicles we lease; interest rate fluctuations and certain related derivatives exposure; foreign currency exchange rate fluctuations; our financial condition and liquidity, as well as future cash flows and earnings; changes in general economic and business conditions; competition; our ability to manage risks related to security breaches and other disruptions to our networks and systems; and changes in business strategy, including expansion of product lines and credit risk appetite, acquisitions and divestitures. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. It is advisable not to place undue reliance on any forward-looking statements. We undertake no obligation to, and do not, publicly update or revise any forward-looking statements, except as required by federal securities laws, whether as a result of new information, future events or otherwise.

         
 
General Motors Financial Company, Inc.
Consolidated Statements of Income
(in millions)
 

Three Months Ended
December 31,

Years Ended December 31,
2017     2016 2017     2016
Revenue
Finance charge income $ 855 $ 736 $ 3,256 $ 2,846
Leased vehicle income 2,324 1,752 8,606 5,896
Other income   73     66     289     241
Total revenue   3,252     2,554     12,151     8,983
Costs and expenses
Operating expenses 381 354 1,390 1,250
Leased vehicle expenses 1,767 1,358 6,415 4,506
Provision for loan losses 184 143 757 644
Interest expense   663     579     2,566     1,972
Total costs and expenses 2,995 2,434 11,128 8,372
Equity income   44     42     173     151
Income from continuing operations before income taxes 301 162 1,196 762
Income tax (benefit) provision   (149 )   (80 )   111     105
Income from continuing operations 450 242 1,085 657
(Loss) income from discontinued operations, net of tax   (255 )   12     (424 )   97
Net income $ 195   $ 254   $ 661   $ 754
Net income attributable to common shareholder $ 181   $ 254   $ 645   $ 754
       
 
Consolidated Balance Sheets
(in millions)
 
December 31, 2017 December 31, 2016
ASSETS
Cash and cash equivalents $ 4,265 $ 2,815
Finance receivables, net 42,172 33,475
Leased vehicles, net 42,882 34,342
Goodwill 1,197 1,196
Equity in net assets of non-consolidated affiliate 1,187 944
Related party receivables 309 347
Other assets 5,003 3,695
Assets held for sale     10,951
Total assets $ 97,015 $ 87,765
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Secured debt $ 39,887 $ 35,087
Unsecured debt 40,830 29,476
Deferred income 3,221 2,355
Related party payables 92 320
Other liabilities 2,691 2,141
Liabilities held for sale     9,693
Total liabilities   86,721   79,072
Shareholders' equity   10,294   8,693
Total liabilities and shareholders' equity $ 97,015 $ 87,765
         
 
Operational and Financial Data
(Unaudited, Dollars in millions)
 

Three Months Ended
December 31,

Years Ended December 31,

Originations

2017     2016 2017     2016
Retail finance receivables originations $ 4,374 $ 3,888 $ 19,920 $ 14,468
GM lease originations $ 5,840 $ 5,894 $ 25,421 $ 25,221

GM new vehicle loans and leases as a percentage of total loan and lease originations

90.0 % 87.5 % 88.9 % 88.3 %
 
 

Three Months Ended
December 31,

Years Ended December 31,

Average Earning Assets

2017 2016 2017 2016
Average retail finance receivables $ 32,754 $ 25,923 $ 30,619 $ 24,275
Average commercial finance receivables   9,710     7,249     9,060     6,133  
Average finance receivables 42,464 33,172 39,679 30,408
Average leased vehicles, net   42,322     32,990     39,255     27,817  
Average earning assets $ 84,786   $ 66,162   $ 78,934   $ 58,225  
       
 

Ending Earning Assets

December 31, 2017 December 31, 2016
Retail finance receivables, net of fees $ 32,802 $ 26,400
Commercial finance receivables, net of fees 10,312 7,880
Leased vehicles, net   42,882   34,342
Ending earning assets $ 85,996 $ 68,622
       
 

Total Finance Receivables

December 31, 2017 December 31, 2016
Retail
Retail finance receivables, net of fees(a) $ 32,802 $ 26,400
Less: allowance for loan losses   (889 )   (765 )
Total retail finance receivables, net   31,913     25,635  
Commercial
Commercial finance receivables, net of fees 10,312 7,880
Less: allowance for loan losses   (53 )   (40 )
Total commercial finance receivables, net   10,259     7,840  
Total finance receivables, net $ 42,172   $ 33,475  
 

(a)

Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $228 million and $178 million at December 31, 2017 and December 31, 2016.

       
 

Allowance for Loan Losses

December 31, 2017 December 31, 2016
Allowance for loan losses as a percentage of retail finance receivables, net of fees 2.7 % 2.9 %
Allowance for loan losses as a percentage of commercial finance receivables, net of fees 0.5 % 0.5 %
 
 

Delinquencies

December 31, 2017 December 31, 2016
Loan delinquency as a percentage of ending retail finance receivables:
31 - 60 days 4.1 % 4.6 %
Greater than 60 days 1.7   2.0  
Total 5.8 % 6.6 %
         
 

Three Months Ended
December 31,

Years Ended December 31,

Charge-offs and Recoveries

2017     2016 2017     2016
Charge-offs $ 315 $ 310 $ 1,171 $ 1,136
Less: recoveries   (132 )   (139 )   (552 )   (542 )
Net charge-offs $ 183   $ 171   $ 619   $ 594  
Net charge-offs as an annualized percentage of average retail finance receivables 2.2 % 2.6 % 2.0 % 2.4 %
Recovery rate as a percentage of gross repossession charge-offs in North America 50.2 % 49.8 % 51.9 % 52.7 %
 
 

Three Months Ended
December 31,

Years Ended December 31,

Operating Expenses

2017 2016 2017 2016
Operating expenses as an annualized percentage of average earning assets 1.8 % 2.1 % 1.8 % 2.1 %
 

Contacts

General Motors Financial Company, Inc.
Stephen Jones, 817-302-7119
Vice President, Investor Relations
Investors@gmfinancial.com

Contacts

General Motors Financial Company, Inc.
Stephen Jones, 817-302-7119
Vice President, Investor Relations
Investors@gmfinancial.com